Consider the information below. The students of a local college have gathered th
ID: 1094965 • Letter: C
Question
Consider the information below. The students of a local college have gathered this hypothetical data on GDP for years 2008-2010.
2008-2010 Recession
2008q3
14,187
na
2008q4
13,884
-2.14%
2009q1
13,663
-1.59%
2009q2
13,641
-.16%
2009q3
13,695
.40%
2009q4
13,814
.87%
2010q1
13,938
.90%
2010q2
14,059
.87%
Instruction: Enter your response as an integer value.
a. How many quarters of negative real GDP growth occurred during the period 2008-2010?
b. Which of the following is correct?
c. The above downturn had
2008-2010 Recession
Year/Quarter GDP (billions of 2005 dollars) Growth rate from preceding quarter2008q3
14,187
na
2008q4
13,884
-2.14%
2009q1
13,663
-1.59%
2009q2
13,641
-.16%
2009q3
13,695
.40%
2009q4
13,814
.87%
2010q1
13,938
.90%
2010q2
14,059
.87%
Explanation / Answer
a. Three quarters of GDP growth show negative growth rate. These quarters are 2008q4, 2009q1, and 2009q2.
b. There has to be at least two consecutive quarters of negative GDP growth to qualify as a recession.
c. The negative GDP growth between 2008 quarter 3 and 2009 quarter 2, and thus qualifies as a recession.